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Real Estate Investment

• The average cost of a house in Romania is £17,000, but £100,000 invested now could be worth £514,000 in 10 years. Buying before the country joins the EU is advised, as hordes of investors are expected from 2007
• Over the last decade many multinational companies discovered real estate investment opportunities in Eastern Europe. The most successful investments to date have been in Poland, the Czech Republic and Hungary. However, it is the opinion of many International Investment Banks that these markets are almost saturated thus diminishing the returns on investments. The time is therefore right to look at an alternative - the Real Estate Investment Market of Romania. A number of statements coming from EU officials make us believe that Romania will become a EU member in 2007. The pace of reforms is pretty fast. At this point, Romania opened 30 negotiation chapters out of the total 31. The local market continues to develop and reached a stable stage, The residential segment has seen the strengthening of sales versus leasing, fact motivated not only by the mortgage loans input but also by the stronger purchasing power of local individuals. Supply has remained constant, while the overall quality has improved considerably. Villa compounds or small blocks of flats brought on the market dwelling units with high standard finishing, large sunny rooms and modern layout. Villas have 200 to 300 square meters of usable space, with gardens that reach 100-300 square meters, while apartments usually provide around 100-150 square meters of usable space. The retail market has a big potential, since all the big retail chains present on the national market announced their plans of expansion in Bucharest and throughout the country. Owing it to its stage of development, the Bucharest retail market represents a good opportunity for chains of supermarkets/wholesalers and discount stores. Rents for stores situated in prime retail areas run from € 25 - € 100 per square meter. As several major international companies are moving many of their back offices into relatively low cost skilled markets, Romania has started to benefit from this international trend called Business Process Outsourcing.
• After the communism collapsed in 1989, the property market in Romania became one of the best investments in Europe available and accessible to non business people as well. If immediately after 1990 one could have bought properties in certain parts of Bucharest for $2000 - $3000, in 2005 the same properties are for sale for the incredible amount of over 100,000 - 200,000 euros. In the '90s foreign nationals with a vision and who were really open minded saw the opportunity and started up in business in Romania investing only ridiculous amounts of money in the region of $5000 - $10,000 at the time. One had to be open minded in those days to decide to invest in a country like Romania despite the negative western press who did no favour to the westerners by undermining the potential of a country like Romania. There is no need to explain how successful were those people who invested at the right time. They are the multi millionaires of Romania today. I would like to pinpoint that unfortunately even in 2005 westerners know too little and in some cases absolutely nothing about Romania and the huge return on investment they would get if instead of keeping their savings in a bank for one year they would invest in properties in Romania and get more than 40% profit in only one year. Foreign IT companies, Banks and Telecom companies invested in Romania and they continue to invest. They bought expensive buildings to use as premises and at the time many people were surprised at the huge amounts of money theses companies were prepared to invest in buildings. Was it worth it? Of course! Not only that their business was successful but in only a couple of years the value of the buildings bought doubled in price. Furthermore their members of staff were paid with less than 1 euro per hour. In 2005 the western press continues to write silly stories about Romania (if any at all) keeping people unaware of the real opportunities. Is the Romanian government too laid back to bother and tell the world about the real opportunities Romania can offer to foreign investors? We have reasons to doubt it. One might think that the total lack of interest and awareness of the western press regarding Romania is just a convenient approach for the Romanian government and the multi millionaires of Romania who are so commercially minded. By 2007 property prices in Romania will be in line with the property prices in the EU. But there is still time.

Romania Real Estate

American-Romanian relations have grown even stronger since July 4, 2002, in the wake of Romania's invitation to join NATO, U.S. President George W. Bush's visit to Bucharest and Romania's contribution to the war against Iraq. The business relationship is expected to get even stronger in light of the visit scheduled for July 14-19 by the US Deputy Commerce Secretary Sam Bodman. The investors According to the National Statistics Institute, trade between Romania and the United States exceeded $1 billion in 2002, with exports accounting for $599 million and imports $535 million. Romania mainly exports electronic equipment (31.41 percent), textiles (22.27 percent) and metals (20.84 percent) to the US. Romania imports electronic equipment (47.83 percent), optical, photo and cinema equipment (14.33 percent) and chemical products. America is the third largest foreign investor in Romania. At the end of 2002, direct investments by 3,462 registered companies totalled $716.6 million.